Wholesale Price Inflation Increases to 2.37% in December 2024

India’s wholesale price inflation rose to 2.37% in December 2024, up from 1.89% in November, driven by higher prices in manufactured products, non-food articles, and fuel and power.

Key Drivers of Inflation

Manufactured Products: Prices increased by 2.14% in December, contributing significantly to the overall inflation rate.

Non-Food Articles: This category saw a 2.46% rise in inflation, up from a deflation of 0.98% in November, indicating increased costs in sectors like oilseeds.

Fuel and Power: The sector experienced a deflation of 3.79% in December, an improvement from the 5.83% deflation in November.

Food Inflation Trends

Overall Food Inflation: Eased slightly to 8.47% in December from 8.63% in November.

Vegetables: Continued high inflation at 28.65%, marginally up from 28.57% in November.

Potatoes: Inflation remained elevated at 93.20%.

Onions: Inflation increased to 16.81% from 14.23% in November.

Retail Inflation Comparison

Retail inflation, as measured by the Consumer Price Index (CPI), decreased to a four-month low of 5.22% in December, down from 5.48% in November, indicating easing consumer price pressures.

Implications for Monetary Policy

The rise in wholesale inflation, coupled with declining retail inflation and a slowdown in economic growth to 6.4% in 2024-25, may prompt the Reserve Bank of India to consider reducing interest rates in its upcoming February meeting.

Summary of the news

Why in News	Key Points
Wholesale price inflation rises to 2.37% in December 2024	1. Inflation Rise: 2.37% in December 2024, up from 1.89% in November 2024. 2. Key Drivers: Manufactured goods, non-food articles, fuel, and power. 3. Fuel Sector: 3.79% deflation in December, improvement from 5.83% deflation in November. 4. Food Inflation: Slight decrease to 8.47% from 8.63%. 5. Vegetables: Inflation at 28.65%. 6. Onions: Inflation increased to 16.81%. 7. Retail Inflation: Decreased to 5.22% from 5.48%. 8. Implications for RBI: May influence RBI’s rate decision in February 2025.
Static Points	Inflation Measures: Wholesale Price Index (WPI) measures inflation at the wholesale level, impacting producers and suppliers. Consumer Price Index (CPI): Measures retail inflation, affecting consumers. RBI: Reserve Bank of India, which controls monetary policy and influences inflation through interest rate decisions.